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Natural Alternatives International, Inc. v. Allmax Nutrition, Inc.

United States District Court, S.D. California

August 30, 2017

NATURAL ALTERNATIVES INTERNATIONAL, INC., Plaintiff,
v.
ALLMAX NUTRITION, INC.; HBS INTERNATIONAL CORP.; and DOES 1-100, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

          MARILYN L. HUFF, District Judge.

         On July 24, 2017, Defendants Allmax Nutrition, Inc. and HBS International Corp. filed a motion to dismiss Plaintiff Natural Alternatives International, Inc.'s second amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Doc. No. 69.) On August 22, 2017, Plaintiff filed an opposition to Defendants' motion. (Doc. No. 72.) On August 30, 2017, Defendants filed a reply. (Doc. No. 74.) The Court, pursuant to its discretion under Civil Local Rule 7.1(d)(1), determines the matter to be appropriate for resolution without oral argument, submits it on the parties' papers, and vacates the motion hearing. For the reasons below, the Court grants in part and denies in part Defendants' motion to dismiss.

         Background

         The following facts are taken from the allegations in Plaintiff's second amended complaint. Plaintiff NAI is a formulator, manufacturer, marketer, and supplier of nutritional supplements. (Doc. No. 66, SAC ¶ 11.) Plaintiff sells its branded CarnoSyn® beta-alanine product to customers throughout the United States and in other countries. (Id. ¶ 1.) Plaintiff alleges that its CarnoSyn® product is covered by a portfolio of trademark, copyright, and patent rights. (Id.)

         Plaintiff alleges that Defendants Allmax and HBS offer to sell and sell dietary supplements containing beta-alanine in the United States, including through retailers located in California. (Id. ¶¶ 1, 8-9, 27-31.) Plaintiff alleges that these acts constitute trademark, copyright, and patent infringement. (Id. ¶¶ 88-130.)

         On July 8, 2016, Plaintiff filed a complaint against Defendant Allmax, alleging claims for: (1) violation of the Lanham Act § 32; (2) copyright infringement; and (3) patent infringement. (Doc. No 1.) On October 13, 2016, Defendant Allmax filed a motion to dismiss Plaintiff's complaint for lack of personal jurisdiction. (Doc. No. 9.) In response to Allmax's motion to dismiss, on October 19, 2016, Plaintiff filed a first amended complaint adding HBS as an additional defendant, alleging the same causes of action as in the original complaint, and adding a claim for civil conspiracy. (Doc. No. 11.) In light of Plaintiff's first amended complaint, on October 20, 2016, the Court denied Defendant Allmax's motion to dismiss Plaintiff's original complaint as moot. (Doc. No. 13.)

         On November 16, 2016, Defendant Allmax filed a motion to dismiss Plaintiff's first amended complaint for lack of personal jurisdiction. (Doc. No. 18.) On February 21, 2017, the Court denied Allmax's motion to dismiss for lack of personal jurisdiction. (Doc. No. 32.) On March 14, 2017, Defendant Allmax filed counterclaims and an answer to Plaintiff's first amended complaint. (Doc. No. 33.)

         On April 25, 2017, Defendant Allmax filed a motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), and Defendant HBS filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. Nos. 43, 44.) On June 26, 2017, the Court granted the Defendants' motions and granted Plaintiff partial leave to file a second amended complaint. (Doc. No. 64.) In the order, the Court specifically dismissed Plaintiff's claim for patent infringement with prejudice and dismissed Plaintiff's trademark infringement claim and its civil conspiracy claim without prejudice and with leave to amend. (Id. at 23.) The Court subsequently denied Plaintiff's motion for reconsideration of that order. (Doc. No. 73.)

         On July 10, 2017, Plaintiff filed a second amended complaint against Defendants, alleging claims for: (1) violation of the Lanham Act § 32; (2) violation of the Lanham Act § 43(a); (3) common law trademark infringement; (4) copyright infringement; (5) patent infringement; and (6) civil conspiracy. (Doc. No. 66, SAC ¶¶ 88-138.) By the present motion, Defendants move pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss Plaintiff's claims for trademark infringement, civil conspiracy, and patent infringement for failure to state a claim.[1] (Doc. No. 69-1 at 4-11.)

         Discussion

         I. Legal Standards for a Rule 12(b)(6) Motion to Dismiss

         In patent cases, a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is governed by the applicable law of the regional circuit. K-Tech Telecommunications, Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1282 (Fed. Cir. 2013). A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the pleadings and allows a court to dismiss a complaint if the plaintiff has failed to state a claim upon which relief can be granted. See Conservation Force v. Salazar, 646 F.3d 1240, 1241 (9th Cir. 2011). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading stating a claim for relief contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” The function of this pleading requirement is to “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

         A complaint will survive a Rule 12(b)(6) motion to dismiss if it contains “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Twombly, 550 U.S. at 555). “Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Id. (quoting Twombly, 550 U.S. at 557). Accordingly, dismissal for failure to state a claim is proper where the claim “lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).

         In reviewing a Rule 12(b)(6) motion to dismiss, a district court must accept as true all facts alleged in the complaint, and draw all reasonable inferences in favor of the plaintiff. See Retail Prop. Trust v. United Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 945 (9th Cir. 2014). But, a court need not accept “legal conclusions” as true. Iqbal, 556 U.S. at 678. Further, it is improper for a court to assume the plaintiff “can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways ...


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